Police recommends martial law extension; Defense chief keeps his cards

July 18, 2017 | 12:07 am

THE HEAD of the police force confirmed yesterday that he has recommended to President Rodrigo R. Duterte an extension of the 60-day martial law period in Mindanao, primarily to round up “narcopoliticians” who are believed to be financially supporting the local terror group Maute.

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Business group urges AirAsia to launch Davao-KL service

July 18, 2017 | 12:07 am

DAVAO CITY — The local business community is aiming to convince AirAsia Group Chief Executive Officer Tony Fernandes to consider making the city’s airport as its Philippine hub and to launch a Davao-Kuala Lumpur service.

Arturo M. Milan, trustee of the Davao City Chamber of Commerce and Industry, Inc. (DCCCII), said they will put forward the proposal when Mr. Fernandes comes to town for the 2017 Davao Investment Conference (ICon) on July 21-22.

“We need to seize the opportunity,” Mr. Milan told BusinessWorld in a text message.

Mr. Milan, head of this year’s ICon organizing committee, said there is a significant potential business and tourist passenger traffic in the Davao-Kuala Lumpur route, given that the two countries are part of the Brunei-Indonesia-Malaysia-Philippines East ASEAN Growth Area.

“We just need a critical catalyst to develop, especially the economic cooperation and an air link will be crucial,” he said.

Mr. Fernandes is scheduled to deliver a speech at the Davao ICon later this week, and is expected to make an announcement at a press conference.

“Although we still do not know what he will announce, we just hope that he will agree to our appeal,” Mr. Milan said.

In April, AirAsia Philippines announced the launch of several new domestic routes, including between Davao and Cebu, Clark, Boracay and Puerto Princesa.

PAL TARGETS FIL-AMS
Meanwhile, Philippine Airlines, Inc. (PAL) is hopeful the backlash from its Davao flights arising from the Marawi crisis and the declaration of martial law in Mindanao will eventually soften as it held Friday a promotional event targeting the Filipino-American market.

“We want to drive home the message that it is safe to travel here in Davao City,” PAL head of external communications Maria Cielo Villaluna told BusinessWorld on the sidelines of the 11^th Ambassadors’ Tour Philippine Reception held at the SMX Convention Center in SM Lanang.

Ms. Villaluna said PAL remains confident in the teamwork between the government and the private sector in the travel and tourism sector.

“We value our market here in Davao and what better way to impart the message that it is safe to travel by showing our presence here,” she said.

The 11th Ambassadors’ Tour, with more than 180 participants composed of US-based Philippine consuls and their entourage, is intended to entice Filipino-Americans to visit both Metro Manila and Davao.

PAL currently has at least seven flights a day between Manila and Davao.

“We are the only carrier that flies from California to the Philippines. From New York, taking our flight is the fastest also because we stop only in Vancouver,” PAL President and Chief Operating Officer Jaime J. Bautista told reporters.

Ms. Villaluna said PAL saw a 15% increase in passengers flying to Davao after President Rodrigo R. Duterte, who comes from the city, won in July last year, but the volume has thinned following the May 23 declaration of a 60-day martial law in Mindanao.

“In fact, there was a clamor for more flights but because of this martial law situation, hindi maiiwasan na may konting agam-agam (we can’t avoid some reluctance),” she said, which is why they are making a push to bring back confidence.

“We just hope that the (martial law) declaration will be lifted soon. Of course the President knows best when to lift it, but we hope that the condition normalizes so that people will again fly and visit the Philippines, and get all the tourists that we need for our economy,” Mr. Bautista said. — Carmelito Q. Francisco and Maya M. Padillo

Blu Girls end Canada bid

July 18, 2017 | 12:06 am

THE Philippine Blu Girls has scored another upset against world no. 3 Canada, 6-3, ending the campaign of the host country in the Canada Cup International Softball Championship in Surrey, British Columbia.

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Jeepney drivers’ rally in Cebu City also anti-BRT

July 18, 2017 | 12:06 am

DRIVERS AND OPERATORS of public utility jeepneys (PUJ) in Cebu joined their counterparts in other areas of the country in yesterday’s nationwide rally against the government’s PUJ phaseout and modernization program, and they had one other matter to protest against: the bus rapid transit (BRT) system in the city. Greg Perez, coordinator of the Cebu transport group, told The Freeman that they want to send the message to the mayor that they are against the BRT, which is seen to affect some 3,000 PUJ drivers and operators. In a separate interview, Mayor Tomas R. Osmeña said he is willing to listen to the transport sector’s concerns. “Their voices should be heard and we have been doing consultations since 2008. We will listen and do what we can. When I was in high school, I remember the calesa (horse-drawn carriage) or parada drivers demanding my father, the mayor, not to phase them out. That’s history,” Mr. Osmeña said. — The Freeman

Cebu Pacific sees strong demand for Japan flights

July 18, 2017 | 12:06 am

CEBU PACIFIC is planning to mount flights to Haneda airport in Japan, should there be additional entitlements for the route.

Cebu Pacific Vice-President for Corporate Affairs Paterno S. Mantaring, Jr. said there is strong demand to operate the Manila-Haneda flight given the proximity of the airport to Tokyo, compared to Narita airport.

“We want to expand our operations to Japan and we want to operate to Haneda but right now we can’t get any allocation entitlements from the government,” Mr. Mantaring told reporters in a recent media briefing.

“We’re asking for holding of air talks between the Republic of the Philippines and Japan so that we can add entitlements,” he added.

The Gokongwei-led airline has been asking for air talks between the two countries since two years ago, and recently renewed its request during the latest air panel meeting.

“We’re waiting for the government of Japan to respond to that request… hopefully in the coming months,” Mr. Mantaring said.

Currently, Cebu Pacific — which has 400 flight entitlements between Manila and Tokyo — offers flights to Tokyo via Narita as well as services to Fukuoka, Nagoya and Osaka in Japan.

Among the domestic airlines, only Philippine Airlines offer direct flights to Haneda.

“I think there is demand [for the Manila-Haneda flights]. It’s near the city so it’s easier for the traveling public, unlike Narita [Airport] which is 60-70 kilometers (kms.) away from the city,” Mr. Mantaring said.

Haneda Airport is the closest airport to Tokyo City, with a distance of only around 15 kms.

Last year, Japanese tourists were the top four market for the Philippines recording 535,238 arrivals, next only to Korea (1.48 million), United States (869,463) and China (675,663).

Aside from Japan, Cebu Pacific earlier said it is also interested to increase the frequency of its Manila and Sydney flights, noting sustained demand for this route.

Cebu Pacific offers flights to over 60 destinations including Dubai, Tokyo, Beijing, Bali and Australia, among others.

The Gokongwei airline is targeting to ferry 20 million passengers this year. In 2016, it carried 19.1 million passengers, up 4% from the 18.4 million passengers flown in 2015. On average, Cebu Pacific flights were 86% full during the year. — Imee Charlee C. Delavin

DBM to implement gov’t restructuring by 2019

July 18, 2017 | 12:06 am

THE BUDGET department said it aims to fully implement a restructuring in government by removing redundant functions by 2019.

Budget Secretary Benjamin E. Diokno said that the proposed trimming of the bureaucracy will be able to be delivered in two years.

“I need two years to fully implement it. So the requirement to separate (government agencies), entirely resign or retire (the government workers)… will come in maybe 2019,” Mr. Diokno told reporters in a chance interview recently.

The Legislative-Executive Development Advisory Council Executive Committee last Thursday endorsed the bill as urgent to the President, among others.

The legislation “is moving. At the House, it’s on third reading, and it is also certified (as urgent). It will take a while before we can really separate (the redundant government functions). But in the Senate, the bill is in interpellation. So we are optimistic that it can be approved this year,” said Mr. Diokno.

Senate Bill No. 1162, or the Rightsizing the National Government to Improve Public Service Delivery filed by Senator Loren B. Legarda, seeks to “right-size the organizational structures of all national government agencies, to simplify systems and processes, and to attain expediency in their front line services.”

Under the program, affected government personnel will be given the option to avail of retirement benefits and separation incentives with the amount based on the time in office, or be placed by the Civil Service Commission in agencies needing additional personnel.

However, it excludes teaching, medical, military positions, as well as positions in Government Owned and Controlled Corporation/Government Financing Institution (GOCCs/GFIs), according to the proposal.

In its report to the Senate Committee of Civil Service, the Department of Budget and Management (DBM) estimated up to 255,295 general civil servants, or 16% of the 1.6 million total government positions will be affected by the proposed legislation.

According to the DBM’s simulation, assuming 15% or 38,294 of the general civil servants are separated from government service, it would cost the government some P54.629 billion for their incentives and terminal leave benefits.

However, funds saved from the implementation of the legislation are estimated at P24.276 billion in the first year of implementation, which is less than half of the initial cost.

Mr. Diokno said that the government can recoup the funds used in separation incentives in two years and three months.

The Senate proposal came after President Rodrigo R. Duterte announced plans to trim the bureaucracy through merging or abolishing government agencies with redundant functions. He made the announcement in his Budget Message for Fiscal Year 2017. — Elijah Joseph C. Tubayan

Ponzinibbio stuns Nelson at UFC Fight Night in Glasgow

July 18, 2017 | 12:05 am

ARGENTINE welterweight fighter Santiago “Gente Boa” Ponzinibbio made it a successful foray in Scotland yesterday, stunning Iceland’s Gunnar “Gunni” Nelson with a first-round knockout at “UFC Fight Night 113” in Glasgow.

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PLDT Capital looking at ‘interesting’ acquisitions

July 18, 2017 | 12:05 am

PLDT, Inc.’s investment arm will review its portfolio and make some “interesting” acquisitions next year, its Chairman and Chief Executive Officer Manuel V. Pangilinan said.

PLDT This, as gains from PLDT Capital’s recent deals to sell its remaining stake in Manila Electric Co. (Meralco) and SPi Global Holdings, Inc will be used to manage debt and partly fund its capital expenditures this year.

“PLDT Capital [is] okay naman. Nothing needs much to be done kasi di ba nabenta yung Meralco shares and yung SPi, so we have enough gains and cash coming from those two transactions to reduce debts and help out in the capex (capital expenditures),”Mr. Pangilinan told reporters in a recent interview.

“Maybe next year, we’ll have to revisit the portfolio. Most likely there will be some [acquisitions], hindi naman malalaki yun. Some interesting opportunities,” he added, without disclosing further details about the planned acquisition.

In 2015, PLDT announced the creation of Silicon Valley-based PLDT Capital to scout for investments and establish business partnerships in mobile technology, software, digital media content and entertainment.

Some of PLDT’s earlier acquisitions included Rocket Internet SE, a German investor in technology start-ups, where the telco giant invested €333 million (around $362 million) for a 10% stake in the firm in August 2014. In October 2014, Rocket Internet went public, which effectively diluted PLDT’s stake, which now stands at roughly 6%.

PLDT Capital also announced in 2015 that it entered a partnership with US-based developer of mobile applications Phunware, Inc., for $10 million (around P460 million).

Meanwhile, Metro Pacific Investments Corp. (MPIC) increased its interest in Meralco and Global Business Power Corp. (Global Power) in May after acquiring the PLDT group’s remaining stake in Beacon Electric Asset Holdings — who owns 35% of the country’s biggest electricity distributor Meralco and 57% of power generation firm Global Power — for P21.8 billion.

Mr. Pangilinan earlier said the divestment of the Beacon investment would help the telecommunications giant focus on its core businesses.

PLDT also during that month said it is selling its remaining stake in business process outsourcing (BPO) provider SPi to Swiss investment firm Partners Group as part of a $330-million deal.

For this year, PLDT budgeted P46 billion for capex, inclusive of “carry-overs” from 2016 for its continuing digital pivot. This year’s capex will be used for its ongoing comprehensive network modernization and expansion program, which will see an increase in fixed line spending.

Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a stake in BusinessWorld through the Philippine Star Group, which it controls.

Shares in PLDT gained P5 or 0.29% to close at P1,725 each on Monday. — ICCD

Gov’t partially awards T-bills as investors ask for higher returns

July 18, 2017 | 12:05 am

THE GOVERNMENT saw mixed results at its Treasury bills (T-bills) auction yesterday, raising only P7.7 billion out of the planned P15-billion borrowing, after returns sought by investors climbed across the board and amid uncertainties offshore.

The papers on offer yesterday were met with P18.6 billion in total demand, still exceeding the P15 billion worth of T-bills the Bureau of the Treasury had planned to issue at its second T-bills auction for this quarter.

The three-month and one-year tenors saw demand exceeding the amounts offered at Monday’s auction, while the six-month papers were undersubscribed. The government rejected bids for the 182-day T-bills after rates went above what the Treasury was willing to pay.

The government decided to partially award the 91-day T-bills, only raising P4.127 billion out of the P6 billion on offer. Total bids reached P9.162 billion and the debt notes fetched an average rate of 2.189%, 6.3 basis points (bp) higher than the 2.126% yield seen at the July 3 auction.

Similarly, the Treasury raised only P3.61 billion from the planned P4-billion borrowing from the 364-day T-bills even as total bids reached P5.93 billion. Yields sought by banks averaged at 2.995%, up 6.9 bps from the 2.926% quoted during the previous auction.

Meanwhile, the government rejected all bids for the 182-day papers after rates sought by financial institutions went as high as 2.679%, 18.2 bps higher than the 2.496% seen two weeks prior. Total tenders stood at P3.55 billion, below the P5 billion the Treasury put on the auction block.

At noon or before yesterday’s auction, yields on the 91-, 182- and 364-day T-bills settled at 2.7764%, 2.975% and 3.2232%, respectively.

The rates quoted for the three tenors were unchanged at the close of trading at the secondary market yesterday.

The National Treasurer attributed the mixed results to a general rise in government security (GS) yields in the previous weeks.

“It is what has happened even during the past two weeks already. We’ve been seeing that GS rates have been spiking,” National Treasurer Rosalia V. De Leon told reporters after the auction.

She said global uncertainties such as the US Federal Reserve’s recent hawkish remarks as well as some offshore central banks’ rhetoric on tightening policy rates contributed to the higher returns requested by banks in yesterday’s auction.

“The pronouncement coming out of the collective messages of the Fed, the central banks of England, in Canada, that they’re really already looking in terms of tapering already,” Ms. De Leon said.

Reuters reported that the Bank of England is mulling when would be the right time to hike rates, with most policy makers suggesting that anytime soon would not be prudent, even as some officials expressed the need for borrowing costs to rise.

Meanwhile, the European Central Bank could tweak their policy rates by September amid an improving economy in Europe. The Bank of Canada hiked interest rates for the first time in seven years last Tuesday.

This unison among global regulators came after hawkish views from the Fed on its plan to hike interest rates anew yearend after it decided to lift borrowing costs for the second time this year during their policy meeting in June.

“And at the same time, [Fed] Chair [Janet L.] Yellen, during her testimony to the US Congress, also indicated that the rate increase will continue and that they’re already considering at the same time unwinding of the bond portfolio of the Fed. We’ve also seen oil prices trending up,” the National Treasurer said.

Ms. Yellen said last week that the US economy is in good condition for regulators to hike interest rates gradually and not too fast to reach the neutral level, with the Fed also on track with its plan of trimming its over $4 trillion bond portfolio.

Asked why the government decided to partially award some of the papers and reject the bids for the 182-day debt notes, Ms. De Leon said the offers for the six-month T-bills were “very unusual,” noting: “That’s 18 bps higher than the previous auction so I don’t think we would really fall for that offer.”

As for the three-month and one-year securities, the National Treasurer said: “It’s aligned with our own calculations, our own estimates.”

Sought for comment, a bond trader said the auction yesterday was “not a good one.”

“But the rates were within market expectations. Not surprised that investors demanded higher rates because we have outstanding short-end bonds that can give similar yields,” the trader said.

Asked what other factors contributed to the state’s decision to partially award the papers, the trader said: “They are still in good cash position.”

The trader added that rates sought by banks rose as some investors prefer securities at the long-end of the curve.

“I think market is looking at longer tenors than T-bills because of higher yields,” the trader said.

The government plans to borrow as much as P195 billion from domestic sources this quarter — through offerings of P105 billion worth of T-bills and P90 billion in Treasury bonds — more than the P180 billion programmed in the second quarter. — Janine Marie D. Soliman

3 children die from live wire electrocution, 1 survives after power returns to Samar

July 18, 2017 | 12:05 am

THREE OF four children in Calbayog City, Samar died after getting electrocuted by a live wire left hanging near a mango tree, just hours after the entire city was energized following a week-long power outage due to a 6.5-magnitude earthquake that damaged facilities. The fourth child survived and was rushed to a private hospital in Tacloban City. Authorities in Calbayog confirmed that the three fatalities were cousins, identified as Nathan, 7, and Joey, 5, both surnamed Tomenes, and Stephen Aying, 7. The one who survived was a 5-year-old boy. They were playing around 6 p.m. Sunday night along Cabanas Street when the fatal incident happened. Calbayog City Mayor Ronaldo P. Aquino said he has ordered a probe to determine if the city’s electricity distributor has been remiss. “I already ordered a thorough investigation for the incident while the city is also set to extend financial assistance to the family of the victims, and see kung nagpabaya ba (if there was negligence) on the part of the Samar Electric Cooperative,” the mayor said. — The Freeman

Marine plywood maker Santa Clara pitches product to homebuilders too

July 18, 2017 | 12:05 am

IN General Santos City, boat makers and hard ware stores have one lingo for marine plywood: Santa Clara.

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South Korea seeks rare talks with North to ease tensions

July 18, 2017 | 12:04 am

SEOUL — South Korea on Monday offered to hold rare military talks with the North, aiming to ease tensions after Pyongyang tested its first intercontinental ballistic missile (ICBM).

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